IRS Resets Transit Limit and Increases Parking Limit – Transit Payroll Deduction Benefit Changes

Beginning January 1, 2012, the monthly pre-tax contribution limit for transit expenses is being decreased from $230/month to $125/month, while the monthly pre-tax parking limit is being increased from $230/month to $240/month. The Federal Stimulus package, known as ARRA, which allowed a monthly pre-tax maximum of $230/month for the transit benefit will expire on December 31, 2011.

There are lobbying efforts taking place for the transit limit and any changes to the 2012 IRS limits will be announced.

If you participate in this payroll deduction benefit, and your transit (bus/El/train) expenses exceed $125/month, you will need to provide PayFlex with your credit card information so the post-tax portion of your transit election each month can be charged. Login to the PayFlex website and select the commuter benefit to update your information.